Monthly Archives: July 2010

While the Chinese government owned Ramu nickel mine in Papua New Guinea is on hold following a court injunction preventing the construction of a marine mine watste dumping system, the Chinese have announced an unprecedented naval flotila will visit PNG later this year.

The ship formation of the Navy of the Chinese People’s Liberation Army (PLA) will consist of the “Zhenghe” training ship and the “Mianyang” guided-missile frigate and will pay a visit to five south pacific countries including Papua New Guinea from late July to late October.

“The aim of the visit is to strengthen the pragmatic exchanges and cooperation between the Chinese military and the navies of the five south pacific countries and develop the friendly relations,” said by an officer of the Information Affairs Bureau of the Ministry of National Defense of the People’s Republic of China.

The Chinese naval ship formation will make its first visit to Papua New Guinea, Vanuatu and Tonga during this trip. Besides, the formation will invite two midshipmen from the Royal Australian Navy and the Royal New Zealand Navy to board the Chinese ships to sail together during its voyage between Auckland of New Zealand to Sydney of Australia. The four midshipmen will eat, live, go through training, work and enjoy recreational activities together with the Chinese midshipmen, so as to enhance the mutual understanding and friendship between them.

It is said that the training ships and the combat ships of the PLA navy had visited foreign countries independently before, but it is the first time for them to visit foreign countries in mixed formation. Through this kind of formation, the midshipmen of the naval academies can broaden their horizons and enhance their abilities while accomplishing their ocean-going training.

Rear Admiral Leng Zhenqing, deputy chief of staff of the PLA Navy, will be the commander of the visiting formation.

“Accident prone, lax regulation, corruption and inefficiency” with “widespread collusion between the mines and the government”. Is this where PNG is headed with the Chinese owned Ramu nickel mine?

From AFP

BEIJING — In China’s coal-rich Shanxi province, the source of much of the fuel that powers the energy-hungry nation, there is an oft-repeated saying: “To make money, all you have to do is dig a hole.”

Hao Pengjun, a former county mine bureau chief and Communist Party official, apparently followed that advice — and then took it too far.

In April, Hao was jailed for 20 years for graft and tax evasion after allegedly amassing 305 million yuan (44.7 million dollars) in ill-gotten gains — a cautionary tale about the corruption endemic to the industry, experts say.

“In Shanxi, collusion between the government and the mines is widespread,” Chu Ren, a retired coal industry expert at the Shanxi Academy of Social Sciences, told AFP.

“The money Hao Pengjun made was about average for a guy in his position. If you do not pay off government officials, there is no way you will open a mine.”

Hao, 60, ruled the mining industry in Shanxi’s Pu county for a decade, serving as county mining chief, mine safety head, coal industry head and, from 2006 onwards, the Communist Party boss of the county’s coal industry.

According to state media, he not only flouted regulations barring officials from owning and operating coal mines, but also made sure his mine remained open when neighbouring pits were shut down under a province-wide safety crackdown.

Reports said it also appeared Hao was taking kickbacks from other Pu county mine bosses, with millions of yuan unaccounted for.

Instead of paying taxes, mine operators sometimes pay off officials to turn a blind eye to safety violations or to obtain permits to extract more coal or expand the scale of their mining operations, Chu said.

Hao’s wife Yu Xiangning, the former head of the county civil affairs department and the accountant for the family mine, was jailed for 13 years. Her brother Yu Xiaohong, who ran their private mine, was given a 12-year sentence.

The trio were convicted of corruption, evading 18.7 million yuan in taxes and misappropriating public funds. They were collectively fined a total of 320 million yuan, and their money and property were confiscated.

According to Xinhua news agency, investigators found 120 million yuan stashed in scores of bank accounts belonging to Hao and his relatives.

The family also owned 35 apartments, mostly prime real estate in central Beijing, valued at another 160 million yuan.

The government has touted his case as part of its 2009 overhaul of the Shanxi coal mining industry, an effort to weed out graft and end a spate of fatal accidents — the result of an unabashed drive for energy profits.

But experts say Hao is a sacrificial lamb, and his conviction is only the tip of the iceberg.

“It was only a matter of ill chance that Hao Pengjun was investigated,” Tian Zhaoshu, a coal industry expert at the Shanxi Finance and Economics University, told AFP.

“Most of the corrupt officials have not been investigated because they are good at concealing their crimes. They use relatives to indirectly operate mines and rake in profits.”

Tian said it was unlikely that corruption in the industry would be stamped out unless China placed checks on the power of local officials.

Pu county, with vast coal reserves and a population of about 100,000, is in scandal-prone Linfen prefecture, home to some of the worst coal mine accidents in China and recently infamous as one of the most polluted places on earth.

The investigation of Hao was launched in September 2008 after 277 people were killed when a hillside mining waste pond burst, burying an entire village in sludge. Local mine operators were arrested and blamed for the disaster.

The calamity prompted sweeping reforms that have led to thousands of small mines being shut down or merged with large state-run conglomerates.

The charges and the sentences meted out to Hao have become a topic of anger in China’s Internet chatrooms, which cite death penalties given to other corrupt officials who amassed far smaller fortunes than Hao.

“His luck was no good — what is pitiful is that there are so many with good luck. What is even funnier is that luck can be bought by money. High-level leaders are the gods of good fortune,” said one user of a Sina.com chatroom.

During his trial, Hao fingered more senior officials — accusations that were struck from the record by the presiding judge.

“There are reasons that I have fallen so low,” numerous state press reports quoted Hao as saying at his trial, accusing the county’s Communist Party secretary of demanding a huge bribe from him as the judge cut him off.

The Pu county government refused to comment on the case when contacted by AFP.

While the controversy rages on over whether the Chinese owned Ramu nickel mine should be allowed to dump 100 million tonnes of mine waste in the pristine marine waters off Madang, an even larger second mine is being planned that will dump even more waste in the same seas.

Marengo Mining is understandably keeping very quiet at the moment about its proposed Yandera copper mine, just inland from the Ramu nickel mine site.

Marengo has been drilling extensively at Yandera to define the extent of the resource – as is shown in this company video – and expects to complete its advance feasibility study by the end of this year.

Marengo says it intends to run a slurry pipeline with crushed ore from the mine to a concentrator on the coast. Initially at a rate of 25 million tonnes per year. That is already five times the volume of the Ramu nickel mine and Marengo anticipates the tonnage will get even greater in the future after start–up.

Various studies and promotions from Marengo “indicate” a total resource of between 700 million and 1.3 billion tons and their concession holds other “prospects” they say.

At the upper indicated resource level, combined with the 20 year 100 million tons of mine waste from the Chinese Ramu nickel operations the poor Rai Coast landowners will be getting a huge 1.4 billions tons of toxic, heavy metal laden mine waste dumped into Astrolabe Bay and the Vitiaz Strait. This is equal to what Newmont Nusa Teggarra’s Batu Hijau mine on Sumbawa in Indonesia will dump into the marine environment there over 25 years (Newmont dumps 160,000 tons per day.)

This means the current debate over what the impacts of the Chinese Ramu mine will be are only the tip of the iceberg in terms of what will happen in the future to people’s lives, communities, fisheries, and sustainable marine ecosystems.

Three months ago, following the court injunction that stops the Chinese building a marine waste dumping system for their Ramu nickel mine, we asked the question where do the Chinese go next?

Of the four options we laid out then (moving the case, appealing, changing the law and removing the Plaintiff’s lawyer) the Chinese have tried three – and failed each time.

So how can we expect them to fight back now the Supreme Court has confirmed the injunctions stay in place?

1. They are going to threaten to pack up and go home

We can expect to hear plenty in the media about how much the injunction is costing the Chinese. About how they are running out of money. And about how they will soon have to pack up and go home. This is all complete nonsense. The Chinese have no limit to the funds they have to invest in the Ramu mine and they know that if they have to, they can safely treat and dispose of the mine waste on land. They would rather avoid the cost and the effort of course, but at the end of the day they will stay whatever happens in the court cases.

2. They will pressure other companies to say PNG is no longer a ‘safe investment option’

Yes, the Chinese will roll out the Chamber of Mines and other friendly puppets to say how much this is affecting the business climate and investment prospects. But again, we know that this is just more bullshit. PNG is crawling with mine exploration companies and nobody else is seriously suggesting they are going to shut up shop just because the Chinese are having a hard time. Also remember, mining and oil companies operate in plenty of countries with tight environmental and social protections – hell the Chinese even said Rudd’s proposed 40% super tax in Australia was okay and wouldn’t affect them investing in Australia

3. They will play the victim

Lets all get ready for the sob story. We are the victims here the Chinese will say. The PNG government invited us in. We have complied with all the laws. We have all the permits. But now we are losing millions of $ every day. Well sorry guys. You KNEW the marine dumping was a least cost worst environmental outcome option. You KNEW marine dumping is banned by your own government in China. You KNEW the landowners had not even been identified let alone consulted. You KNEW all this but you went ahead regardless. You are the guilty one here NOT the victim.

4. They will continue to pressure the PNG and Madang govts to buy off the landowners

We have already seen Prime Minister Somare being sent by the Chinese to offer the landowners K40 million to drop their opposition to the marine dumping. Expect to see plenty more of this over the coming weeks and also Governor Amet being pushed to play a bigger and bigger role as a puppet for the Chinese.

5. They will get their spiv landowners to start bullying and harassing the plaintiffs

The Chinese have already tried using their little group of landowner thugs to intimidate the court plaintiff’s – but thus far they have usually been too drunk to inflict any real damage. But now will the Chinese start trying to get them better organised? Might they even resort to arming them and encouraging some more full blooded tribal fighting? Or even try using their own security forces in attacks on the landowners? We certainly hope not.

If nothing else, it is certainly going to continue to be a very interesting time in Madang Province over the next few weeks and months!

By JULIA DAIA BORE, The National

RAMU NiCo, developers of the giant Ramu nickel project in Madang, have failed in the Supreme Court to quash an interim injunction to proceed with the construction of a deep sea tailings placement (DSTP) system and get the mine off the ground.

A three-judge Supreme Court last Friday dismissed the appeal by Ramu NiCo and its state partners against the lower court’s granting of the interim injunction which had effectively stopped work on the last stage of the construction at Basamuk Bay.

The ruling means that a trial date will be set, probably next month, for the substantive matter to be argued in court.

Four landowner leaders – Eddie Tarsie, Farina Siga, Peter Sel and Sama Melambo – and the Pommern Incorporated Land Group had sought the interim orders in the National Court in Madang in March and April that the DSTP system off-shore of the Basamuk and Astrolabe bays would be detrimental to all landowners along the Madang coastal areas and their entire livelihood.
They also claimed that it was not the best practice of environmental management activity.

Justices Catherine Davani, Derek Hartshorn and Don Sawong ruled that while they noted the submissions made by Ramu NiCo and its partners, they were also mindful that if the DSTP was allowed to proceed, “the potential environment harm far outweighs the lifting of the injunction”.

“The balance of convenience lies in maintaining the status quo at least until after the trial of the substantive matter,” they ruled, adding that “it is better to take a precautionary approach than to proceed in haste”.

Ramu NiCo and its partners had, in essence, submitted in their appeal that it was lawful for them to proceed with the construction of the DSTP system as agreed to in their joint venture agreement and also based on the mining development contract signed between the parties concerned, including the PNG government and MCC to start mining nickel in the Kurumbukari area of the Bismarck Ranges before the end of this year.

The partners had argued in court that the landowner leaders, in their ILG in this proceeding, only represented their own interests and not that of the bulk of the Basamuk Bay people.

After the BP oil spill, the wisdom of aggressively exploiting natural resources for monetary gain has hit us like a hole in the world.

But you just have to look at the water quality of our rivers to see that polluting without penalty has long been considered an economic advantage.

With regional bodies issuing licences to pollute our waterways, this competitive advantage has been fiercely guarded by private interests. Our rivers weep with farming run- off and the faecal consequences.

Right now in Papua New Guinea, issuing licences to pollute has been taken to a new level.

Worried about the ecological threats and harm to marine-based livelihoods, Papua New Guineans were galvanised into legal action and won a temporary injunction.

In response, the government bypassed select committee scrutiny, consultation and parliamentary debate and introduced emergency legislation.

This legislation put all of the power in the government’s hands to grant environmental permits, outlawing any third party lawsuits.

It removed legal rights to seek compensation for any environmental damage, even if companies “were negligent or at fault”.

It also stripped indigenous landowners of existing customary rights. Papua New Guinea’s attorney-general then issued a decree imposing a ban on any media discussion or public debate on the matter.

Environment Minister Benny Allen explained: “It is in the best interests of the country to ensure that all existing permit-holders who are developing resource projects in the country and any future resource projects will be safeguarded by this amendment.”

Corruption watchdog Transparency International said their actions were an “abuse of parliamentary process”.

Despite threats of arrest, more than 3000 people marched in Madang Province on June 30 to protest against the law changes. Protest organiser George Ireng said simply: “We must never remain silent.”

There are vested interests in silence in Papua New Guinea.

The main daily newspaper is owned by Malaysian logging giant Rimbunan Hijau.

When the company first began logging forests in Papua New Guinea it used a spotlight at night, working 20 hours a day, removing timber using destructive techniques.

Ordinary people came together, protested and put on pressure, eventually making this way of logging illegal.

Pavan Sukhdev, head of the Green Economy Initiative for the United Nations Environment Programme, describes soulless corporations as the enemy of the environment.

He argues: “It’s up to society and its leaders and thinkers to design the checks and balances that are needed to ensure that the corporation does not simply become cancerous.” That’s bad news for Papua New Guinea, rich in unexploited resources and poor when it comes to checks and balances.

The Economics of Ecosystems and Biodiversity report was presented by the Environment Programme this week.

The report aims to highlight the “economic invisibility of nature’s flows into the economy”. For example, it calculates that the aggressive logging of 75 million hectares of forest in China from 1949 to 1981 has actually cost China US$12 billion a year.

It explains that forests provided “ecosystem services” such as climate and water regulation, nutrient cycling, soil conservation and flood prevention. Extreme deforestation in China resulted in drought, flash floods, tragic loss of life and significant economic costs.

Putting a dollar value on what we haven’t exploited as a resource is a very new way of thinking about cost benefits and profit. The trickle-down effect of that logic is inevitably going to be slow.

The third largest intact rainforest in the world is in Papua New Guinea.

It covers more than 100m hectares and is close to 60m years old.

Though this country is Australia’s neighbour, it seems woefully off our ecological and human rights radar.

Little wonder that Amnesty International reported this year that the global justice gap is nowhere more apparent than in the Pacific region.